Is it possible to increment identity column during UPDATE statement?

Typically you'd always use the same EmployeeID for any given employee. New rows in other tables would simply reference the original EmployeeID.

If you wanted to, you could update the Emp row with the last insert/update that occurred in any table for that emp, just as a reference, but you would not assign a new EmpID. There's one emp, only, taking different actions, not multiple Emps.